September 21, 2007

I haven’t made any changes to my portfolio since the last entry. The market has gone up about 4% in the last three weeks, and my portfolio is up about the same, so I’m happy. Even my PowerShare fund is up about 5%. However, those “evil” oil companies are leading the way, with about an 8% gain.

In class, we just finished talking about IPOs, and I have been wanting to pick up an IPO stock just to show I have been paying attention. I just missed the Athenahealth offering last week, but there are several more coming up next week. Duff & Phillips (DUF) are a private equity firm, similar to Blackstone while Babcock & Brown Air (FLY) is an aircraft leasing firm, formed by the Australian investment firm, Babcock & Brown. There’s also an IPO coming from a bio-tech firm Bioheart, specializing in well, heart treatments.

In choosing between the three, I’m going to go with Babcock & Brown Air. They’re actually an established company (Ireland-based, incorporated in Bermuda) and the IPO is really the first offering of their ADR (American Depository Receipt) shares. I’m not entirely sure I would want to play with an equity firm in this market, and Bioheart is going to be a very small IPO of a company that has miniscule earnings and isn’t expecting to have a product approved until the middle of next year, at the earliest.

Two other side bonuses are: Babcock & Brown Air is not US-based, so the weak dollar, and expected rate drop later this year can only strengthen their position (I hope), and they’re already promising a quarterly dividend of $.50 per share. I’m hoping for a winner. We’ll see... Their expected price is between $22 and $24 per share, although I expect it to be much higher before the average buyer could get at them. I’ll keep an eye on the market next week, and see when it would be reasonable to say I could have bought shares on the open market, and price my purchase there. I should also expect to set an upper bound of when I will take the money and run - I don’t want to get greedy.

Finally, the money market fund is a stupid idea for this project. I can pretty much pick any fund for my “unused” cash, so I’m going to move it into much more aggressive fund. I’ll stick with Vanguard, but go with their “Emerging Markets Stock Index” fund (VEIEX). I’ll take the whopping $0.0012 gain per share (for 11 days) from VMMXX, combine it with the balance in that fund and place it all into my new “default” fund.

Action	Symbol	Amount	Price	Extended Value
SELL	VMMXX	40154.28	1.00	40154.28
DIV	VMMXX	40154.28	0.0012	48.41
BUY	VEIEX	1269	31.66	40176.54
Cash				26.15